Financial Performance practice assessment 1 task 8. Question help please!!
pittuck23
Registered Posts: 6
Hi All,
Im struggling with these types of questions - contribution, optimal product mix.
Would someone be able to go through the question for me?
Thanks
Sam
Im struggling with these types of questions - contribution, optimal product mix.
Would someone be able to go through the question for me?
Thanks
Sam
0
Comments
-
It would probably help if i left the question -
3000kgs avaliable
Tig -
Selling price - 4000
mat - 2400 (£400 per kg)
lab - 400
prod cost - 450
admin cost - 300
prof per unit - 450
Units - 200
Tag -
Selling price - 4950
mat - 3000 (£400 per kg)
lab - 600
prod cost - 450
admin cost - 300
prof per unit - 600
Units -300
Need to know contribution per unit for both, contribution per kg of material.
Optimal product mix0 -
CONTRIBUTION PER UNIT (TIG)
£4000- (£2400material+£400labour) = £1200
CONTRIBUTION PER KG OF MATERIAL(TIG)
£2400/£400cost per kg= 6KG
£1200/6= 200
SAME PROCEDURE AS ABOVE FOR TAG
And this leave TAG with a contribution of 180 per kg of material HENCE THE OPTIMAL PRODUCTION ORDER will be TIG then TAG . TIG has more CONTRIBUTION compare to TAG
HOPE THIS HELPS0 -
IN ADDITION TOO ABOVE,
CONTRIBUTION PER KG FOR TAG
4950-3600(MATERIAL & LABOUR COSTS)= 1350/(£3000total material cost/£400 cost per unit) = 1350/7.5 = 180
OPTIMAL PRODUCT MIX
TIG
1200 allocated material/6kg = 200
3000available kgs - (200(CONTRIBUTION FOR TIG * 6KG PER UNIT) = 1800/(3000/400)
3000-1200= 1800/7.5= 240
So OPTIMAL PRODUCTION MIX
TIG 200 and TAG 240
HOPE THIS HELPS
0
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